Wednesday, January 17, 2018

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Wilderness Realty, Inc.

Maine Land Sales Specialists

Tips About Buying Maine Land

Benfits of Land Ownership

“Land—no one can make it”.  We all have heard that old adage.  It basically implies that land is a finite resource that is in continual demand, especially as the world population keeps growing.  Keep it in mind as you read this post.

As an investment, land is a good place to park some of your hard earned cash for the long term.  Over time, land increases in value; it just does not do so in a predictable manner like a cash savings account earning interest.  How many times have you heard someone say, “Back 20 years ago, I could have bought that 20 acres for…” and it is always for a sum much lower than current prices.

Land in Maine is currently valued significantly lower than land south of its borders.  Remember that Maine is within a 10 hour drive of nearly a quarter of this nation’s population—that’s roughly 75,000,000 people.  These are people that are used to those higher values.  Don’t forget the old adage mentioned above and you can see the potential for a huge demand for Maine land.  Higher demand for a finite resource translates to higher values—a good investment over time.

Unlike most other investments, land can be used as it grows in value.  You can build on it, grow a garden, park a camper trailer, pitch a tent.  Larger parcels can be farmed, hunted on, and logged.  Trails can be made for ATV use, cross country skiing and hiking.  The uses are limited only by your imagination.

Next time you browse through our website, think about the advantages of owning land.  It will be one purchase that will give you enjoyment as well as a good return on your dollar.

Tree Growth Tax Program

The are many economic advantages to owning timberland in Maine.  You may be wondering that this Tax Program is all well and good, but there must be a “catch”.  There is – you must pay real estate taxes on an annual basis to maintain ownership of your timberland property.

Real estate taxes for timberland vary from town to town and can run upwards to $10 per acre, sometimes more.  There is a statewide program for owners of at least 10 acres of timberland which can reduce your taxes by 50% or more.  It is called the Maine Tree Growth Tax Law.

A property must be at least 10 acres in size to qualify.  A timber management and harvest plan prepared by a licensed Maine Forester is also required.  Re-certification is required every ten years.  There is a one-time penalty for any land withdrawn from the program or there is a change in use.

Some things to consider:

  1. If you buy land that is already enrolled, you have one year from the date of transfer to keep it in the program (new management plan) or take it out (and incur the penalty).
  2. You can take a portion of an enrolled property out of the program and pay the penalty only on that portion withdrawn.  One would do this if they plan to build on the land; withdraw 1 or 2 two acres for a building site and keep the remainder in the program.
  3. You CAN harvest trees.  You are expected to harvest trees according to the management plan.
  4. You can take a credit against your Maine Income Tax once every ten years.
  5. If you are considering enrolling your property in the program, identify those areas that you or a future owner may want to develop.  It may be advantageous  for you to NOT include these areas in tree growth.

This is a wonderful program for timberland owners to reduce their real estate taxes.  For more information consult Bulletin No. 19 available from either the Maine Revenue Service or the Maine Forest Service.

Boundary Line Maintenance

Probably the most important “duty” a landowner should undertake is the delineating and maintenance of property lines.  This is imperative when undertaking a timber harvest.  It also can be helpful if there are any trespass issues.  Knowing where your property is located on the face of the earth can go a long way for a landowner’s peace of mind.

If your property has been previously marked out, simply go out and “refresh” the lines.  The most common practice is to blaze (take out a chunk of wood with an ax) the previously marked trees and paint the blazes.  You can “fill in” with new blazes/paint on trees that are between and in line with the older marked trees.  This practice is useful because it employs other potentially younger trees as older blaze trees die.  Spray paint from a hardware store works well but forest supply stores sell paint specially made for this purpose; it is more expensive but lasts longer.

If your land is not marked, you will need to employ the services of a surveyor.  Surveyors will research the registry of deeds, produce a map and mark out the boundaries of the property.  There is a cost for this work and this is another reason to maintain your lines.  One way to reduce your survey cost is to have the surveyor mark the boundary with flags and then you can go out and blaze/paint the trees.  Don’t wait too long, the flagging deteriorates with weather and lasts about 1 year.

The best times to blaze or paint property lines are early spring before the leaves sprout, late fall after leaf fall, and warmer winter days especially late winter when there is a good crust for snowshoeing but still enough ice to get across bogs and swamps.

Property line maintenance can be hard work.  You need to be in good physical shape.  Don’t let this be an excuse for not maintaining your property lines.  Take your time and do sections.  Have a friend or relative help out.  If you are just physically unable to do the work yourself, hire a marking crew.

Whether you do the work yourself or hire it out, boundary line maintenance is a value added endeavor for YOU as a landowner.

Land Surveys

A survey of a landowner’s property is a valuable asset.  It can be costly.  This post will highlight some of the basics regarding surveys.

There sometimes is a misconception that land must be surveyed before it can be sold.  It does not.  There are numerous circumstances in which a survey is not practical.  Again I will emphasize that a survey can be costly.  A landowner should consider the costs of a survey along with its merits.

Surveyors in Maine are licensed.  They must take educational courses, work as an apprentice and pass a demanding test.  Because of this governmental oversight, surveyors are highly regarded.

A surveyor performs three basic tasks:

  1. The first and most obvious is to physically locate the property on the ground by marking corners and perimeter lines.
  2. The second, which may be the most important, is to research past deed records of the subject property as well as surrounding properties to verify the subject property’s location.  This research may also uncover a host of legal matters affecting the property including right of ways, encroachments, boundary line agreements, water rights etc.
  3. Finally, a surveyor will produce a map showing the location of the property and will include any notes mentioning items discovered during the research phase.

Each phase takes time and the work is generally billed by the hour.

Sometimes survey maps are recorded in the county registry of deeds, especially subdivision maps.  Attorneys often rely on survey maps when drafting legal descriptions of a property.  Landowners like them for their “peace of mind” attribute.

Surveys certainly add value to a property.  Landowners may want to consider a survey of their property.  A property for sale that is surveyed is an obvious bonus.  Check out Wilderness Realty’s current listings of surveyed properties.